Sizing Up Small Caps

Glass Is Half-Full at This Milk Giant

Giant milk producer Dean Foods could gain 30% over the next 18 months—or more in a buyout.

Dean Foods is a slimmer, trimmer, and far more attractive investment than it was a year ago. The country's largest milk producer sold off its private-label dairy products company in December 2012 for $1.45 billion and spun off its organics division, WhiteWave Foods (ticker: WWAV), to shareholders last spring.

Dean (DF), which has more than 50 dairy brands, including Garelick Farms, Dean's, Lehigh Valley, and TruMoo, has also adopted...